The Opera Lover

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ABSTRACT: ONWARD AND UPWARD WITH THE ARTS about financier Alberto Vilar and his arrest for mail fraud. On the evening of May 26, 2005, financier Alberto Vilar attended an Internet conference featuring eBay C.E.O. Meg Whitman. Vilar's early enthusiasm for Internet and technology stocks had put him in the Forbes ranking of the 400 wealthiest Americans. In 2000, his personal fortune amounted to $1 billion. With his business partner, Gary Tanaka, he created an investment company called Amerindo. What distinguished Vilar was his remarkable philanthropy for the arts. He generally takes in 50 Metropolitan Opera performances a year, and an equal number of operas elsewhere in the world. Lavish and much-publicized gifts to the world's leading opera companies and other music institutions had made him “the largest supporter of classical music, opera, and ballet in the world.” The donations he made between 1996 and 1999 amounted to nearly $300 million. In return, his name adorned the Grand Tier of the Met and was etched on the menus at the Met's Alberto Vilar Grand Tier Restaurant. He also served on the Met's board of managing directors. On May 27th, Vilar was arrested by the U.S. Postal Inspection Services for mail fraud. He was unable to produce the $10 million bail and he remained in jail for almost 4 weeks. Along with Tanaka, Vilar was ultimately charged with defrauding investors and embezzling $5 million from heiress Lily Cates. Vilar's chief motive for embezzling seems to be to give the money away. It appears that, at the time of his arrest, Vilar actually had a negative net worth. He was released on June 23rd, but remains under house arrest in his apartment. “I was completely abandoned,” he said. According to Vilar, he was born in Havana, Cuba, and lived there until his family fled in the Castro revolution. He attended Washington & Jefferson College, in Pennsylvania, then joined Citibank. In 1979, he founded Amerindo with Tanaka in London. In the 1990s, Vilar bet heavily on technology stocks and his wealth grew exponentially. He began giving thousands of dollars to the Met-$100,000, then $250,000, a year. He underwrote Cecilia Bartoli's Met debut, in 1996, for $2 million, but was disappointed when his name failed to appear prominently in the production's program. Mentions Joseph Volpe, the Met's general manager, and his dislike of Vilar. In the mid-1990s, Vilar joined the Met's board of trustees and became a managing director. Soon afterward, he pledged $20 million to the Met, on the condition that he would control and invest the funds. To his friends Valery Gergiev and the Kirov Opera, he pledged $14 million; to Placido Domingo and the L.A. Opera, he pledged $10 million; to the Royal Opera House, he pledged $10 million. Mentions his second wife, Maria Dichov. Mentions Dana Smith and Lily Cates, a close friend who invested prominently in Amerindo. Vilar became the most sought-after donor in the music world. After 2000, Amerindo stock plunged. Remarkably, virtually all of Vilar's net worth was invested in the company. In 2001, the worst year in Amerindo's history, Vilar gave away more money than he ever had before-over $100 million. It was increasingly apparent to Amerindo's staff and to Tony Knerr, a philanthropy consultant, that Vilar was making pledges of money he didn't have and had little likelihood of ever fulfilling. Eventually, Knerr renegotiated some of Vilar's pledges, but the Met refused to bargain. In June 2002, Cates invested $5 million in a new Small Business Investment Company Vilar claimed he was launching. According to the S.E.C., within days of Cates's investment, Vilar received $1 million in his personal checking account and $3.1 million was wired to a Luxembourg account. Meanwhile, he stopped returning calls from various music institutions. When the Met pledge came due in late 2003, no payment was forthcoming from Vilar. Mentions Vilar's embezzling $2 million from Placido Domingo. Apparently, most of Vilar's life story was fiction; his family had never lived in Cuba nor had they fled the Castro revolution. Word of his financial plight and failure to honor his commitments spread. In 2004, Cates demanded that Vilar return the $5 million she invested and Vilar refused. In 2005, Cates closed her account with Amerindo and her lawyer approached the S.E.C.; describes the letter Vilar sent the S.E.C. In 2003, the Met removed Vilar's name from the Grand Tier and dropped him as a managing director. On January 5th, it announced that Mercedes Bass was donating $25 million to replace Vilar's pledge. The trial of Vilar and Tanaka, on counts of money laundering and mail, securities, and wire fraud, is scheduled to begin April 17th. The S.E.C. has filed parallel charges. If convicted, both men face fines of over $10 million and prison terms of up to 155 years.